Trick or Treat: The Word on Cookies

It was big news to many this summer when the U.S. government’s Office of Management and Budget announced that it was considering approving the use of cookies on government Web sites. Persistent cookies had been previously banned from federal sites since 2000, but Obama’s administration is interested in moving the sites into the 21st century in order to offer its users increased customization and to avoid dissatisfaction with federal government properties.

In related news, after an investigation into its privacy policies by the Office of the Privacy Commissioner of Canada, Facebook recently agreed to revamp them to better adhere to Canada’s more stringent privacy laws. While experts said the social network could simply have adopted a different privacy law for its Canadian users, it instead opted to apply the changes to its entire user base of over 200 million global users. Some speculate that other countries were close to launching similar investigations, and that Facebook’s effort was a preemptive attempt to put their concerns to rest. Others suggest that, moving forward, the policy changes will lead U.S. Internet users to expect more privacy control from the rest of the players in the social media space.

To say that Internet privacy remains a hot topic in online media would be stating the obvious, but these newest developments have many marketers questioning how their campaigns might play out moving forward. Those who work in online media would argue that the government’s ability to recognize that cookies can be useful to both sites and their visitors is a step in the right direction, but concerns raised by consumer advocacy groups simultaneously remind us that Internet users remain skeptical at best. One study conducted by comScore, Yahoo, and Doubleclick reported that 40 percent of Internet users delete their cookies each month. These Internet users would probably tell you that cookies are synonymous with a lack of privacy protection.

For marketers, cookies remain an important tool for ad targeting. They’re also essential for data collection, which in some cases proves more valuable than the ads themselves. Think of it this way: A major brand could go directly to a publisher’s site and pay a $30 CPM (define) for a targeted display campaign, but if it had access to that site’s user data, it could apply it to inexpensive inventory purchased someplace else (from an ad network, perhaps) and still get a behaviorally targeted or retargeted campaign. Companies like BlueKai have harnessed the power of cookie data by facilitating its exchange between publishers and advertisers through the BlueKai Data Exchange, essentially a data marketplace.

The same applies to the data available to advertisers through social sites like Facebook. It’s infinitely useful, but the consumers to whom it belongs aren’t likely to appreciate this fact, even if they realize the degree to which such data can improve their online experience by ensuring they are served more relevant ads. What for us is a treat to use (if you discount the challenges of discrepancies) amounts to a nasty trick to those whose information — however impersonal — is being collected, often without their knowledge (though not for lack of making this information available to them).

The question before us, then, is this: How can we take advantage of cookie and site user data for the benefit of our campaigns while still demonstrating that we respect Internet users’ privacy concerns? This dilemma has plagued us for years and isn’t likely to resolve itself anytime soon. On a positive note, an increased focus on Internet privacy — the likes of which the U.S. government’s new approach and Canada’s Facebook investigation have facilitated — might shed some more light on the issue for consumers and boost their understanding of how and why Internet privacy polices exist. Some appreciation for the benefits of this type of data to them would go a long way in improving consumer and advertiser relations, particularly when on the surface it can all be a little…scary.